Litigation funding has occurred as a game-changing financial solution, revolutionizing the method legal arguments are managed. This practice concerns a third party, known as a litigation funder, delivering funds to cover the costs of lawsuits in exchange for a share of the potential judgment or settlement.
Technological advancements like machine learning (ML) and artificial intelligence (AI) are driving a technological revolution in the legal profession, with huge swathes of data being analyzed and collected like never before. Litigation funding allows plaintiffs to pursue strong cases, delivers solutions by mitigating financial risks, and grants access to justice without shouldering unreasonable expenses. This rising demand for litigation funding is a key driver behind the growth of the market. In addition to this, according to the research report of Astute Analytica, the global litigation funding investment market is growing at a compound annual growth rate (CAGR) of 6.6% during the forecast period from 2023 to 2031.
The demand for technological advancements in litigation funding investment is: –
The companies operate litigation analytics software, powered by artificial intelligence to turn data mined from court documents into helpful, actionable information for lawyers. The disputes market is only at the start of its technological revolution and one area which is ripe for advancement is litigation finance. There is also little information about how data is utilized to inform decisions taken by their investment committees about which disputes to back.
Predictive analytics
One of the most exciting applications of artificial intelligence in litigation funding is predictive analytics. Predictive analytics leverages machine learning (ML) algorithms to estimate the probability of success in a legal case. By analyzing extended amounts of historical case data, artificial intelligence systems can determine factors and patterns that influence case outcomes. These systems can predict the potential rewards and risks related to funding a particular lawsuit, delivering invaluable insights to litigation funders.
Case assessment
Artificial intelligence could redefine the pattern cases are evaluated for funding. Conventional techniques involve legal strategies, comprehensive manual reviews of case documents, and risk factors. AI-powered systems can efficiently categorize and analyze legal documents, determining relevant information and key arguments. This not only speeds up the assessment process but also minimizes the risk of overlooking crucial details.
Financial transparency
Transparency is a crucial aspect of litigation funding. Artificial intelligence tools can improve financial transparency by automatically managing and tracking the flow of funds throughout the litigation process. This level of automation ensures that funds are allocated appropriately and that all financial transactions are recorded accurately, reducing the potential for disputes and ensuring compliance with regulatory requirements.
The other benefits of artificial intelligence in litigation funding investment are: –
Improved decision-making
AI-driven predictive analytics deliver funders with data-driven insights, enhancing the quality of investment decisions.
Efficiency
Artificial intelligence accelerates the case assessment procedure, letting funders quickly select and evaluate cases for funding.
Risk mitigation
By determining potential pitfalls and risks, artificial intelligence allows funders to make informed decisions that lessen the probability of unsuccessful investments.
Cost savings
Automation of administrative document analysis and tasks can lead to cost savings, making litigation funding more economically achievable.